By Dexter Gauntlett
Daily Bruin Reporter
For the first time in six years, the Associated Students of UCLA
reported a net gain during the 2000-01 fiscal year.
ASUCLA forecasts a continual 1 percent annual net gain through
2005, despite losing $1.5 million due to a drop in the student fee
next year.
But a drop in revenue, combined with a UC-wide budget cut,
hiring freeze, lack of income from computer sales and debt are
obstacles ASUCLA must overcome to reach their projected gain in net
revenue next year.
In response to the UC-wide 15 percent budget cut requested by
Gov. Gray Davis, Chancellor Albert Carnesale instituted a partial
hiring freeze Thursday that called for managers and supervisors to
exercise caution in all spending areas.
ASUCLA executive director Patricia Eastman said the association
knew the mandate was coming for a few weeks, and though she
doesn’t expect it to severely impact the way the organization
does business, it is factored into the decision-making process.
The non-profit organization had been making a steady gain in the
1 to 2 percent range since 1970, but during the early ’90s it
suffered a loss in revenue due to a series of setbacks, including
recession, city riots, renovation and earthquakes.
Then last year, expansion to Ackerman Union led to a gain in net
revenue.
“We brought in Moby Disc and Copeland’s, and then we
focused on the nuts and bolts of the retail operation’s gross
margins,” Eastman said.
Last year, ASUCLA returned to a $2.1 million net revenue ““
its highest level since the association’s most profitable
fiscal year in 1989-90.
Last year’s returns came despite continued repayment of
its $20 million debt to the university for seismic renovation to
Ackerman Union, which began in 1995. Part of that debt reduction
came from a five-year increase to the student fee from $7.50 to
$51, which took effect in 1997.
According to Randy Hall, a graduate student representative on
the ASUCLA Board of Directors, the association’s current debt
does not affect its ability to fund student groups and services
““ even in the event of a loss in net revenue.
He said the ASUCLA-sponsored Interaction Fund ““ budgeted
at $100,000 ““ is the direct fund from which student groups
and services receive money.
“Student groups wouldn’t have any impact in the
short run,” Hall said. “Having a net income this last
year has allowed us to commit to reducing the student fee to $7.50
next year.”
Eastman said that with that drop in student fee, the $1.5
million reduction in income will result in a $900,000 gain,
compared to this year’s $2.1 million.
The gain, although smaller, would be sufficient to sustain
business, Eastman said, adding that there would not be an
additional increase in the prices of textbooks or apparel at the
UCLA Store outside normal inflation rates.
One of the largest non-building expenses for ASUCLA comes from
employee salaries and benefits. According to Jerry Mann, director
of the Student Union, it’s difficult to make cuts in non-wage
areas. Last year, ASUCLA terminated approximately 15 percent of its
career employees.
Eastman attributed expense reduction, including eliminating the
44 career employees, as the single biggest dollar item that saved
money. She said there will not be a need to eliminate any more
career employees in response to the hiring freeze.
The freeze also calls for a hold on purchasing new equipment.
With sales in the computer sector already suffering, a hold could
impact ASUCLA.
According to Mann, the university purchases nearly half of all
computers sold at the UCLA Store, and ASUCLA depends on that
service for revenue.
Last year, computer sales accounted for 20 percent of overall
sales at the UCLA Store. Eastman could not comment on projected
sales in the computer sector for this year, but said it will be
less than last year.